Divided Supreme Court narrows EPA’s regulation of greenhouse gases

Today, a divided Supreme Court gave the EPA the ability go forward with regulations that limit the emissions of greenhouse gases from most industrial sources. The ruling, however, would leave sites that emit only greenhouse gases (and not other pollutants regulated under the Clean Air Act) free from restrictions.

Six of the Court's nine members found this unsatisfying in varying ways, with four wanting to see the EPA's original plan approved. Two others hoped to see the agency's ability to regulate carbon emissions pulled entirely.

The roots of this decision date back to 2007, when the Supreme Court ruled in a case now referred to as Massachusetts v. EPA. That decision indicated that the EPA had the right to regulate greenhouse gas emissions under the Clean Air Act. It did not, however, tell the EPA how to craft those regulations, although subsequent decisions suggested the statute provided a degree of flexibility in crafting emissions limits.

Scalia: no tailoring

The rules the agency released in June attempted to work around a problem in the language of the Clean Air Act, which was written with pollutants like lead and mercury in mind. The statute calls for the EPA to regulate any source that emits more than 250 tons of the pollutant; most major sources of CO2 emit far more than that. In fact, under a strict regulatory approach, the EPA would have to issue permits to 6.1 million facilities (it currently regulates 15,000 under this provision). The administrative costs alone would jump by $21 billion.

Since the EPA recognized this as unworkable, it set a much higher limit of 100,000 tons per year of carbon dioxide or an equivalently potent amount of another greenhouse gas. This "tailoring" approach to the distinct issue of greenhouse gases was then challenged in court by a variety of groups, from industry organizations to individual states.

Writing for the majority, Justice Antonin Scalia struck down the tailoring approach. The general argument is that if a statute produces absurd results—and even the EPA recognizes that the Clean Air Act does in this case—then an agency doesn't gain the right to rework the statute in order to produce saner results. Left on its own, this portion of the ruling would be enough to throw out the EPA's regulations.

But history has left the EPA with an alternate approach. The enforcement of the Clean Air Act has been structured so that, if an industrial source is subject to regulation because of one pollutant, its emissions of other pollutants are also subject to regulation—even if it doesn't emit enough to normally require the EPA to act. These are termed "anyway" sources, as in "the EPA is regulating them anyway."

Normally, these cases are handled by installing hardware like scrubbers, which remove pollutants from the exhaust of power plants. Since that approach is analogous to carbon capture and storage, Scalia determined that the "anyway" approach can be safely applied to carbon emissions as well. This brings in the vast majority of the sources that the EPA had been planning on regulating anyway. But it could limit the agency significantly going forward, since it would limit the options for regulating any other sources of carbon emissions in the future.

Dissents galore

The "anyway" portion of the decision was also accepted by Breyer, Ginsburg, Sotomayor, and Kagan. But all of them dissented from Scalia's decision that greenhouse gas emissions could not be regulated on their own. The dissent, authored by Breyer, essentially accuses Scalia of doing something he hates: rewriting the law from the bench, specifically in a way that removes greenhouse gases from consideration. If the language of the Clean Air Act were interpreted such that it was focused on sources, rather than individual pollutants, Breyer writes, the EPA's approach makes perfect sense.

And more significantly, that's more in keeping with Congress' intent when the law was crafted. According to Breyer, "Nothing in the statutory text, the legislative history, or common sense suggests that Congress... was trying to undermine its own deliberate decision to use the broad language 'any air pollutant' by removing some substances" from regulatory oversight.

Justices Alito and Thomas also think Scalia got something wrong, but only because he felt bound by previous Supreme Court Decisions. Alito comes straight out and says, "I believed Massachusetts v. EPA was wrongly decided at the time, and these cases further expose the flaws with that decision." So, Alito and Thomas argue that Scalia erred in accepting "anyway" regulations.

Where does that leave us? For now, the EPA can largely go ahead with its current regulatory plan, as the vast majority of the source of greenhouse gas emissions that it was targeting will still be within its powers to regulate.

But going forward, the EPA is likely to be heavily constrained. It appears to have originally intended to tighten regulations as emissions fell and newer, more efficient technology dropped in price. Now, as the electrical power industry gets its emissions in order, the EPA will have nothing else to regulate and nowhere else to turn if it intends to get the national emissions down. The result will either be an overburdened power industry or an EPA that's unable to regulate something it's declared is a pollutant.